Ciena (CIEN) Q4 Earnings & Revenues Top Estimates, Up Y/Y
Ciena Corporation CIEN reported fourth-quarter fiscal 2023 (ended Oct 28) results, wherein adjusted earnings per share (EPS) of 75 cents beat the Zacks Consensus Estimate of 68 cents. Earnings improved 23% year over year.
Quarterly total revenues were up 16.3% year over year to $1,129.5 million driven by increasing demand momentum, especially from cloud provider customers. The top line surpassed the Zacks Consensus Estimate by 2.5%.
Non-telco customer revenues increased 52% year over year in the reported quarter. Two customers represented 10%-plus of revenues, representing 29.7% of the top line in the fiscal fourth quarter.
Following better-than-expected results, shares of CIEN were up 1.2% on Dec 7 and closed trading at $46.31. In the past year, shares have lost 8.8% of their value compared with sub-industry’s decline of 9.9%.
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Segment Results
Total revenues in Networking Platforms (77.6% of total revenues) increased 16.5% year over year to $876.9 million. We expected the metric to be $876.6 million.
Platform Software and Services’ revenues (7.3%) totaled $82.1 million, up 14.7% from the prior year. We projected the metric to be $76.6 million.
Blue Planet Automation Software and Services’ revenues (1.8%) decreased 5.7% to $20 million. We suggested the metric to be $18.4 million.
Ciena Corporation Price, Consensus and EPS Surprise
Ciena Corporation price-consensus-eps-surprise-chart | Ciena Corporation Quote
Total revenues in Global Services (13.3%) were $150.5 million, up 19.9% year over year. Our estimate for segmental revenues was $129.2 million.
Region-wise, revenues in the Americas were $801.4 million, up 10.8% year over year. Europe, the Middle East and Africa generated $164.1 million revenues, up 21.5% from the prior-year levels. Revenues in the Asia Pacific totaled $164 million, up 45.9% from the year-earlier figure.
Other Details
Non-GAAP adjusted gross margin was 43.7% compared with 45.2% a year ago. Adjusted operating expenses were $337.6 million, up 7.9% from the prior-year levels.
Non-GAAP adjusted operating margin was 13.8% compared with 13% in the year-earlier quarter. Non-GAAP adjusted EBITDA increased 16.5% year over year to $178.8 million.
Cash Flow & Liquidity
For the quarter that ended on Oct 28, 2023, Ciena’s net cash generated from operating activities was $195.5 million. In the prior year, it used net cash from operating activities of $15 million.
As of Oct 28, the company had $1.25 billion in cash and investments, and $1,543.4 million of net long-term debt.
In the reported quarter, CIEN repurchased 4.2 million shares worth $188.8 million.
Guidance
For the first quarter of fiscal 2024, management expects revenues in the range of $980 million-$1.06 billion. The adjusted gross margin is estimated in the mid-40% range. Adjusted operating expenses are projected to be $350 million.
CIEN plans to repurchase shares worth $250 million in fiscal 2024.
For fiscal 2024, management anticipates revenue growth in the range of 1-4%. The adjusted gross margin is envisioned in the mid-40% range. Adjusted operating expenses are suggested to be $355 million per quarter.
Zacks Rank
At present, Ciena carries a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Cadence Design Systems CDNS, Adobe ADBE and Watts Water Technologies WTS, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Cadence’s 2023 EPS has remained unchanged in the past seven days at $5.11. CDNS’ long-term earnings growth rate is 19.5%.
Cadence’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of CDNS have surged 61.5% in the past year.
The Zacks Consensus Estimate for Adobe’s fiscal 2024 EPS has remained unchanged in the past 30 days at $17.86. ADBE’s long-term earnings growth rate is 13.5%. Shares of ADBE have gained 80.9% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies 2023 EPS has improved 2.8% in the past 60 days to $8.00.
WTS’ earnings outpaced the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have jumped 35% in the past year.
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